If you work in Wyoming, and your company is enrolled in the state workers’ comp program, there are a few things you should know: Your boss can fire you for no reason. Your company can kill you due to its own negligence, with impunity. And if you do get hurt on the job and your workers’ comp claim is challenged, the burden of proof is on you.
Employers — those who enjoy legal immunity for their own negligence in work-related injuries and deaths — got a discount on their workers’ comp premium. Their premiums are among the lowest in the nation, due in part to Wyoming’s success in growing its workers’ comp fund, which ballooned from $1 billion in 2008 to $1.8 billion today.
That’s an admittedly alarmist take on the worker-employer-state relationship in Wyoming, but not an inaccurate one. Most workers fare well here. For those who suffer a work-related injury — a broken finger, or an abrasion to the eye, for example — workers’ comp usually comes through nicely. They get some temporary disability income and the medical treatment needed to get back to work.
That’s the grand bargain of workers’ compensation struck in the United States more than a century ago: A no-fault occupational injury insurance system, administered by the state (in Wyoming’s case), in which workers relinquish the right to sue their employer for on-the-job injuries and death, but gain greater certainty that their post-accident needs will be met. Employers avoid liability, and distribute the risk of a potentially bankrupting cataclysmic accident. The state is able to protect its citizens and industries with this arrangement and maintain a healthy labor force.
But the grand bargain only benefits the greater Wyoming good when all parties get what they were promised. If any one of the three interests in the workers’ comp bargain — the state, the employer, or the employee — gets short shrift, the system fails.
At present, the state and employer appear to be well-served by a flush workers’ comp fund that keeps premiums low. The only party whose interests seem to be at risk is the one with the most to lose. Employees can still fall through the cracks. One at a time. Quietly. Sometimes with devastating outcomes.
Read Part 2 in this series, “Who really cheats Wyoming workers’ comp?”
Lee Mosser hopes to have a good outcome to his claim, so he got an attorney. In fact, the state is paying for his attorney — a common benefit of no-fault workers’ comp.
Mosser says the state unfairly declined to cover his back injury, which was related to his pelvic injury suffered on the job in January 2013. He was carrying a dish rack full of steak weights at a Casper restaurant when he fell hard on his back.
“That’s when I felt something had broken,” Mosser said. “That’s when the pain started.”
He filed a workers’ compensation claim, received temporary disability payments and began treatment for a fractured inferior pubic ramus — his right hip being the primary source of searing pain — which the state comp division paid for.
Months later, Mosser strained to pick up his infant granddaughter but a jolt of pain in his lower back prevented him from lifting her. He’d noted back pain throughout his claims and reports to the state and in conversations with doctors, according to his attorney Hampton Young. But the state insists the back injury is unrelated to his fall at work.
A doctor first noted the back injury — a mild protrusion at the base of his spine, just inches from the pubic fracture — eight months after his accident at work, as something new, an attorney for the state said. Mosser said his lower back pain had been with him ever since his fall at work. Attempting to lift his granddaughter months later only made him acutely aware of the injury.
Young argued his client couldn’t have differentiated the pain between two injuries in such close proximity, and that both were caused by the fall at work.
But the state workers’ comp division wasn’t backing down. Part of its duty to all injured workers, officials say, is making sure money from the workers’ comp fund only goes to qualified work-related injuries and illnesses, and death benefits — an all too frequent occurrence in Wyoming. The state intensely scrutinizes each claim.
“When we leave speculation out and look at the evidence before us, the medical records in this case tell us a different story than the one we heard here today,” Casper attorney Amy Taheri said at Mosser’s medical commission hearing in May. “[Medical records] note he has right hip pain, after he slipped and fell at work [in January 2013]. There is no mention of back pain at all.”
Mosser’s attorney disagreed, and said back pain is included in Mosser’s original workers’ comp filing.
They’re fighting an uphill battle, Young says. When it comes to a denied claim the burden of proof is on the injured worker — who often doesn’t realize the program will provide an attorney to represent him or her.
Successfully overcoming a challenge by the state is difficult, and some injured workers simply give up in the face of a state denial, Young said. Back injuries are notoriously complicated and rarely easily resolved, medically or legally, under workers’ comp.
“It’s hard to get through the bureaucracy,” Young said, qualifying that his perspective is usually through the experience of workers fighting denied claims.
Fighting to keep the bargain
So goes a typical contested workers’ compensation claim. Workers’ comp officials are careful to approve only those claims that qualify, because accepted claims are a liability to the state program for the life of the worker.
Wyoming workers’ comp is required to cover the potential lifetime liability for the 200,000 to 300,000-plus employees who work for participating employers at any one time.
“Coverage is for the lifetime of that person and that injury,” said John Ysebaert, administrator for Wyoming Workforce Services’ Office of Standards and Compliance. “So we book a reserve and set aside money in a reserve account [the Wyoming Workers’ Compensation Fund]. If we were to stop [the workers’ comp program] today, we’d have money in that fund to pay every claim in their lifetime.”
The oldest active claim under file at Wyoming workers’ comp dates back to an incident in the 1950s. And, to the state’s credit, the Workers’ Compensation Fund is healthy today. In fact, it has grown by $800 million in the past eight years.
But the fund hasn’t always been flush, and Wyoming’s history of wrangling over workers’ compensation provides a glimpse of how the state has valued business and the common worker in the grand bargain.
In the midst of Wyoming’s oil bust in the 1980s workers’ comp was shedding $700,000 monthly, while the program held millions in uncovered liabilities.
Scrambling to stop the bleeding, the Legislature convened a special session in 1986 and temporarily diverted a portion of mineral severance tax revenue from the Permanent Mineral Trust Fund to the workers’ comp fund. Lawmakers also passed legislation “authorizing rate determination by the worker’s [sic] compensation division, subject to filing rates with and review by the Wyoming insurance department and approval by the governor; modifying payment of employer premiums; generally increasing administrative control by division over worker’s [sic] compensation benefits …”
Or, as Wyoming AFL-CIO executive secretary Kim Floyd recently put it, the Legislature “gutted” benefits to workers.
By the mid-2000s the workers’ comp fund had not only recovered, it exceeded the program’s liabilities — by anywhere from $77 million to $283 million. Lawmakers entertained a proposal to give employers a rebate. That didn’t sit well with worker advocates. They successfully lobbied to stop the effort.
“We had to remind the Legislature that back in [the 1980s] they had a special session on workers’ comp and slashed benefits all over the place,” Floyd said. “That’s the workers’ money. That is not the state’s money.”
By 2008, the fund had grown to nearly $1 billion, still in excess of its liabilities. Yet complaints were mounting that workers’ comp was unnecessarily starving injured workers, and that administrators routinely rejected claims. Floyd said one state administrator estimated then that 60 percent of the claims the division challenged were ultimately found to be legitimate — unnecessarily delaying benefits while injured workers lost their cars, their homes and sometimes their families.
A series of special hearings across the state led to modest reforms in 2009, including an annual cost-of-living adjustment and an increase in death benefits.
The state also stepped up training efforts and forged voluntary safety alliances with several sectors of Wyoming industry, acknowledging the state’s consistent ranking as the worst or among-the-worst in the nation for workplace fatalities. It was a recognition that a big part in living up to the grand bargain of workers’ comp is preventing on-the-job injuries and fatalities from happening in the first place. And equally important in the years following the reform efforts, a change in attitude toward injured workers eased what many had testified was a reflexive instinct to deny claims without reasonable cause.
Floyd credits much of the success of implementing the workers’ comp reforms — and attitudes in the workers’ comp division toward workers — to former Workforce Services Director Joan Evans, who led the agency from 2007 to 2015.
A 2012 report appears to back up Floyd’s summary of the program under Evan’s tenure. After her arrival and the reform efforts of 2009, the Office of Administrative Hearings saw a significant decrease in the number of claims contested by the state, as well as an increase in state challenges upheld. OAH reported that 96 percent of its 2,159 workers’ comp case decisions in 2012 were not appealed to district courts.
“Evans brought some real consistency back to the agency,” Floyd said. “To me, that was one of the biggest changes ever made, was Joan Evans’ belief that workers weren’t getting a fair shake.”
Do workers get their fair share?
So how did Wyoming add $800 million to its workers’ comp fund in just eight years?
Most of it came from returns on investing a portion of the fund as a part of the state’s $19 billion investment portfolio. The investment return to the workers’ comp fund was $89.5 million in 2015 alone. Total return on investment from 2008 through 2015 was $513 million — an annual average of $64.1 million. The rate of return on investments from the fund ranged from 4 percent to 6 percent.
At $1.8 billion, the fund is flush — nearly perfectly in balance with the program’s liability, state officials say. The state’s liability for workers has increased in step with the fund itself during the past eight years. That means the workers’ comp division expects to pay out all $1.8 billion on claims filed to-date, over the lifetime of those individuals with open claims. The state needs to continue to grow the fund each year to cover new claims.
The state reviews and estimates the program’s liability annually, Ysebaert said, and adjusts workers’ comp premiums paid by participating employers accordingly.
“Two years ago we rolled them [employer premiums] back 3.5 percent because the fund was doing so well, and injuries were down.”
And had workers’ comp investments not netted $513 million since 2008, the division would have had to raise employer premiums to generate that same amount. Instead, employer premiums have remained fairly flat and low for the past six years — a good deal for participating employers.
The state, in turn, gets to add up to 45 percent of the workers’ comp fund to its investment portfolio (Wyoming has one of the largest sovereign investment funds in the world). All of the returns on investments from the workers’ comp fund go back to the fund.
At $1.8 billion, all parties agree there’s plenty of money for Wyoming to care for each of its injured workers. So does it?
Checks written by workers’ comp have increased 67.4 percent since 2006 — but most of that goes to medical providers, not injured workers. One state report notes that nearly 82 percent of all workers’ comp claims from 2004 to 2010 were medical only, “meaning there is no disability or impairment compensation paid on the claim.”
In 2015, the division paid $178 million in claims, $119.4 million — or 67 percent — of which went to medical providers.
Administrators say that’s the way workers’ comp is supposed to work; emphasize getting workers as healthy as possible and back to work.
They say a bigger concern is injured workers who go without the help of workers’ comp. Worker advocates, attorneys and even state officials acknowledge that an untold number of work-related injuries go unreported. Wyoming’s Occupational Epidemiologist Meredith Towle said that there are many holes in the overall tapestry of workplace safety data, and they point to unreported injuries.
During boom times contractors desperately try to keep their workers’ comp claims down and their workplace safety records as clean as possible — the bigger companies doling out the contracts demand it, Towle said. During a downturn, workers don’t want to bring attention to themselves or appear to cost their employer a higher premium.
“I think the real problem we all struggle with is you can’t research what’s not reported,” Towle said.
A recent U.S. Bureau of Labor Statistics report concluded, “While the estimate of three million serious work related injuries [nationwide] each year may seem extremely high, it is undoubtedly only a fraction of the true number.” It continued; “Numerous studies provide documentation that many, and perhaps the majority, of work-related injuries are not recorded by employers, and that the actual number of workers injured each year is likely to be far higher than the BLS estimate.”
The same report estimates that perhaps 40 percent of eligible injured and sick workers nationwide actually apply for workers’ comp benefits.
State officials say the number of reported injuries has trended downward for the past several years — which is good. But the severity of injuries has increased.
According to one report, the state had an “estimated 2,390 occupational injury and illness cases with days away from work in private industry” in 2014. Permanent Partial Disability and Temporary Total Disability benefits are paid on a percentage or whole of the statewide average wage, which was $3,771 per month in 2016 and about $3,891 so far this year. (Here’s an explanation of Wyoming Workers’ Compensation benefits.)
In other words, workers’ comp is no windfall for injured workers — especially for higher-wage earners. Often they only receive a portion of their normal monthly earnings, and only for a limited amount of time. While temporary wage benefits are critical to workers and their families while they heal from an illness or injury, most critical is the worker’s recovery and post-accident health, which is reflected in where workers’ comp money goes — mostly to medical providers.
Even when there is compensation awarded for a permanent injury or amputation of body parts (which falls under permanent partial disability), Wyoming ranks low among states nationwide, according to a ProPublica investigation.
The division asks each workers’ comp claimant and employer to complete a satisfaction survey. Overwhelmingly, satisfaction ranks high. “It tends to be a bit higher on the employer side, I don’t know why,” Ysebaert said.
One Wyoming worker, who asked not to be named, told WyoFile the state workers’ comp division staff came to his aid when his employer objected to his injury claim. “I’ve got a friend and two family members who went through hell [with workers’ comp],” he said. “I was scared shitless, but I didn’t have one problem with workers’ comp.”
Lives in the balance
Tami Studer, a paralegal for the Law Office of Hampton Young, Jr., works with dozens of workers’ comp clients, and she lives with an injured worker.
Her husband Philip Studer, 45, suffered a crushed lower lumbar joint on the job nine years ago. He will likely never again be the family’s breadwinner — a fact that weighs heavily on his mind, Tami said. After several years hoping to return to full-time work as a mechanic her husband realized he’d instead have to apply for permanent total disability. But the state is balking.
“Every day it’s a struggle,” Tami Studer said. “He wants to work, he just can’t.”
She said she believes the state’s workers’ comp program is designed to protect the $1.8 billion fund more than the injured worker. After a certain amount of time, some case analysts stop returning phone calls and emails, Studer said. Sometimes the state declines to pay for a prescription, and there’s no way to contest the decision.
“Why not pay for it? Why not help them out?” Tami Studer said. “That’s what you’re there for. You’re there for the worker. You’re not there to hoard the money, and that’s what they’re doing, they’re just hoarding it.”
What may seem like perfunctory matters in the greater $1.8 billion workers comp trust is anything but for Philip Studer, for Lee Mosser, for their families and thousands of workers and families like them in Wyoming. What’s at stake are careers, quality of life, and sometimes life itself.
As of this writing, the medical commission had not issued its decision in Mosser’s case. He cannot afford health insurance, and so has foregone medical treatment for his back injury, Young said. For now he’s simply living with the pain.
CLARIFICATION: This story was updated June 23, 2016 to clarify that the total $1.8 billion of the workers’ comp fund is what the division expects to pay for all open claims to-date. — Ed
— Next in WyoFile’s report on workers’ comp; How common is fraud, and who short-changes the system most?
— This story is part of a six-topic series addressing issues of importance to Wyoming sponsored by the Wyoming Humanities Council as part of the Pulitzer Prizes Centennial Campfires Initiative, a joint venture of the Pulitzer Prizes Board and the Federation of State Humanities Councils in celebration of the 2016 centennial of the Prizes. The initiative seeks to illuminate the impact of journalism and the humanities on American life today, to imagine their future and to inspire new generations to consider the values represented by the body of Pulitzer Prize-winning work. For their generous support for the Campfires Initiative, we thank the Andrew W. Mellon Foundation, the Ford Foundation, Carnegie Corporation of New York, the John S. and James L. Knight Foundation, the Pulitzer Prizes Board, and Columbia University — Ed